House and Senate negotiators agreed Thursday to provide Israel with $3 billion in foreign aid in fiscal years 1988 and 1989, and adopted the Senate’s foreign aid debt-restructuring plan, which could save Israel $2 billion over two decades.
The aid level to Israel was never in doubt. As was the case in 1987, Israel is designated to receive $1.8 billion in military aid and $1.2 billion in economic support — all in the form of grants.
The full Senate and House still have to vote on the two provisions, which are contained in the fiscal 1988 “catch-all” spending bill. A vote was expected early this week.
The Senate negotiators convinced their House counterparts to adopt the foreign debt plan, which the Senate approved by voice vote Dec. 11. The Senate plan was co-sponsored by Sens. Daniel Inouye (D-Hawaii) and Robert Kasten (R-Wis.), chairman and ranking minority member of the Senate Foreign Operations Subcommittee.
The plan allows private banks to refinance at lower interest rates all high-interest foreign aid loans. Israel currently has the highest outstanding debt in high-interest loans, roughly $5.45 billion. The plan does not affect an additional $5 billion in low-interest loans, that Israel owes the United States.
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